Tories plan to give cash to families who recycle and scrap 'heavy-handed' fines

Households would be paid cash to recycle under a scheme proposed by the Conservatives last night.

George Osborne said he wanted to replace penalties with rewards for people who take the trouble to sort their rubbish.

In a speech today he will propose a scheme used in 500 cities and towns in the United States to encourage green behaviour.

Green incentive: George Osborne wants more families to recycle like the Irwins

The Shadow Chancellor will point to the UK's low rate of recycling relative to other European Union countries as a major justification for changing public behaviour.

In 2005 Britain sent 22.6million tonnes of rubbish to landfill.

Mr Osborne wants to capitalise on growing public outrage at the way councils have been encouraged to levy swingeing fines on families who fail to abide by draconian new rules.

'The Government's approach is an old-fashioned one: use the threat of fines and punitive taxation to force people to recycle,' he will say.

'We've all seen how unpopular this heavy-handed approach has been with the public.

'What's more, it is extremely expensive to administer and encourages irresponsible behaviour like fly-tipping or back yard burning.'

Mr Osborne will call for a switch to financial incentives.

'Instead of using sticks, we can use carrots instead,' he will say.

Councils must pay a £32 landfill tax for every tonne of rubbish that they cannot recycle. The Government has said it will increase by £8 a year each year until 2011, when it will be £48.

Mr Osborne will point to the American example where local authorities offer to share the savings from reducing their landfill bill with private companies that find ways of increasing recycling.

One firm is RecycleBank, which offers to split the savings with local authorities if it manages to reduce the rubbish they bury.

The company pays households up to £25 a month for recycling.

Mr Osborne will tell the Green Alliance's summer reception in London: 'The more they recycle, the more they get paid.

'The best part is that none of this impacts on public expenditure in any way.

'This approach has achieved startling results. In some communities, it has increased the amount of household waste being recycled by more than 200 per cent.'

He will add: 'While the poorest households were previously the least likely to recycle, as soon as they receive a financial incentive for recycling, they typically become among the most likely.'

The Tories have approached the Local Government Association, the London Mayor's Office and Conservative local authorities such as Windsor and Maidenhead to study how to implement similar schemes in the UK.

Mr Osborne will also announce that, under the Tories, landfill tax will not fall beneath £48 after 2011 to give councils and businesses greater certainty about the bills they face.

He will say: 'While Labour want to regulate, ban and interfere to get their way, the Conservatives want to work with people and give them incentives to act in a socially responsible way.

'The fight against climate change is the greatest challenge my generation faces. We will not shirk from this fight.'